Growth hacking: with minimum investments towards maximum growth

It sounds like every entrepreneur's dream: to run a successful marketing campaign with minimal (financial) resources. Is that possible in 2019? Growth hacking seems to be the answer.

Traditional marketing laws dictate that the output you get from your marketing campaign is directly proportional to the input you put into it. For every euro invested, you can expect two in return. This is how many large companies, national and international, still reason today. Armies of marketers beg on large multinationals on a daily basis for large budgets so that they can set up a super-tight, comprehensive campaign around their product. And that while more and more business experts are gradually declaring traditional marketing to death.

One of the principles that is increasingly cited as a dead-end successor to traditional marketing is growth hacking. The term growth hacking was introduced in 2010 by the American top entrepreneur Sean Ellis, best known for his share in the success of Dropbox. In its most flattened form, a growth hacker is someone who knows how to generate insane growth (in sales and customers), but does not have to make a large investment in money, FTE or other resources. Just as a life hack makes your life easier without having to buy an expensive device, a growth hack ensures significant growth in your sales without a large investment. But how do you do that?

The end of large-scale campaigns

Traditionally, successful traditional marketing has been step-by-step. A campaign is designed from a marketing point of view. This is then technically arranged. Finally, data analysis is taking place to determine the success of the campaign. Often the latter is by no means a small part of guesswork; because how do you know how the performance of your product or service would have developed without this campaign? Analyzing traditional marketing campaigns always looks to some extent.

Within large companies, these various aspects are often literally separate departments that (hopefully flawlessly) have to work together. At smaller companies it is one entrepreneur who always sets up a different hat.

Traditional marketing is increasingly losing its power since the world around us continues to digitize. A large marketing campaign that, if all goes well, ensures a few percent growth in turnover compared to a costly investment: it is becoming increasingly unattractive in a world that is increasingly influenced by fast-growing start-ups and innovative newcomers who end their market in no time put a head. Such a campaign is simply too bulky.

The growth hacker no longer sees three separate functions in marketing, development and data analysis. For example, development is also used as a marketing tool. The growth hacker does not invest a lot of time and money in traditional campaigns, but is more creative. The growth hacker is looking for a way to grow: grow fast and grow fast.

How does a good growth hacker grow your business?

The characteristics of a growth hacker

What makes someone a growth hacker now? What characteristics can be assigned to him? Building on the above description of the traditional marketing campaign: the growth hacker can be seen as the marketer, data analyst and developer in one. He is the coding specialist who thinks like an entrepreneur, or the marketer who knows how developing works. He knows both sides of the spectrum and therefore looks at the age-old business question in a completely revolutionary way: "How do I get more customers?"

For many companies, that question is more or less translated into the question: "How do I get more revenue?" Whether that revenue growth is due to an increase in the number of customers or an increase in value per customer makes it not even that much at the end of the ride. In both cases, the result of the marketing efforts is assessed as positive. The growth hacker reasons radically differently. To be able to grow fast and fast, it is not enough simply to get some more value per customer. Many new customers have to be reached, and quickly.

To achieve this, the growth hacker is constantly looking for 'weaknesses' in the market system of his market segment. He analyzes the market functioning as it is today and tries to expose where the system fails. Consider, for example, the place where a lot of conversion is lost. The growth hacker responds to these weaknesses by 'hacking' them: developing a trick to overcome that weakness. Does it all sound a bit abstract? Time for a few striking examples.

Example 1: API growth hack

An API (Application Programming Interface) is a set of functions and procedures that allow different programs (or components of programs) to communicate with each other. The API growth hack is one of the simplest examples of a growth hack because the problem (and in many cases the hack that solves this problem) is very recognizable. The API growth hack is the answer to the question: "How do I quickly reach the right target group?" Traditional marketing often comes down to a shot: a banner on a website, a commercial on TV, an advertisement in a magazine. It costs a lot of money to install them and it just depends on who actually looks at it.

The API growth hack is a form of piggybacking on a larger, successful platform with more or less the same target group as your service or product. Hence the name API: it is included (and therefore communicated) with other software. The best known appearance is the integration between social media mutually and with other services. Instagram could become immensely successful in a very short time because it integrated with Facebook and Twitter and therefore quickly gained recognition among users of these services. Spotify is another great example: users could link Spotify to their Facebook account and let their friends know what music they were listening to.

The API growth hack actually does two things: it adds value for users, but ensures that you quickly bring your product to the attention of your target group, without having to do any effort. In some cases, users are even rewarded for highlighting the product through a different platform: in games like Farmville, you could earn extra points or credits if you posted on Facebook about your progress.

How does your product or company go viral?

Example 2: Virality growth hack

The virality growth hack - it is already woven into the name - is based on the assumption that going viral for your product is the key to rapid brand recognition and therefore customers. With viral we soon think of films that suddenly pop up everywhere or tweets that are shared by hundreds of thousands of twitterers in a short time. However, going viral of a product or service works slightly differently.

It is a misconception to think that content going viral is purely dependent on happiness. Virality does have a formula. The growth hacker is aware of this formula and responds to it in a handy way. The virality growth hack recognizes this power of it go viral and enforces this effect on users.

With the virality growth hack, users are therefore more or less deployed as the carrier of your commercial message. A good example comes from the case of Sean Ellis, the man who introduced the term growth hacking. To make Dropbox go viral, he offered current users free storage space on the condition that they invited their friends to also create an account. The result: an increase of more than 100 million users.

Another early example is the emergence of Hotmail at the turn of the century: the service only really became popular when the makers added the caption “PS I love you to every email sent via Hotmail. Get your free email at Hotmail ”. Of course including a link to the Hotmail homepage. Every email sent via Hotmail had now become a small advertisement.

Conditions for growth hacking

Growth hacking can be an important tool in almost every market segment to quickly reach a large target group and attract more customers. But not every company, product or service is susceptible to growth hacking. What should you take into account before you start growth hacking?

First of all - and it sounds like an open door - you need product good to be. Your product no longer needs to be in the MVP phase. You must already have a somewhat purified product that generates customer satisfaction. That has everything to do with the second condition, namely that both your product and your company are ready scale increase. The term scalability ('scalability') is often mentioned in combination with growth hacking. A growth hack is no good if, for example, after a short time it appears that your server capacity is insufficient to handle an increase in new customers. Consider what would happen if you suddenly had twice as many customers tomorrow. Will anything collapse? How can you fix that before? Also good to realize: digital products and services are by definition the most suitable for growth hacking, because a digital product is difficult to sell out or become full. For comparison: a hotel, restaurant or place to go out has a maximum capacity and is less susceptible to growth hacking, although you can use it to actually use that maximum capacity.

The next condition is having the right skills and knowledge. In many cases you will not be the perfect growth hacker yourself or you will be employed, but you will start with a growth hacking team in which all required disciplines are present. This involves a developer, an SEO copywriter, a data analyst and a marketer with a healthy dose of entrepreneurship. It is also important to have a good impression of your current one marketing and growth processes. How do you get customers now? What does your marketing look like? Where are you successful and where are you not? If necessary, draw this system out to identify the weakness in the system. In this context, also consider your landing pages, your distribution channels, your acquisition and retention strategies and your customer satisfaction surveys.

Testing, measuring, knowing

When you start your growth hacking team, it is important to realize that a growth hacking campaign works radically differently than a marketing campaign. This is not something you like live then wait, leaning back in your chair, for the phone to ring. Growth hacking is continuous testing, measuring and adjusting. You must constantly know how your strategy works out.

A classic tool that can come in handy here is the A / B test. Here you put two different forms of your growth hack next to each other and you test which variant sorts the most conversion. If you test multiple versions and variables simultaneously, it is called one multivariate test. Stop the variants that perform poorly and try to fine tune the well-performing variants.

Indispensable in this respect is also sound user research. Especially if you, for example, participate in an integration with another service or platform, you want to know how your users experience that integration. Do they find it an added value? Is it a pleasant experience? After all, you do not want to recruit new customers at the expense of the user experience of your existing customers. So ask for feedback and respond actively to this.

When did your growth hack succeed?

The key question to which every entrepreneur would naturally like an answer: when will I be successful? When it comes to growth hacking, that is precisely a difficult question to answer. A successful growth hacking campaign is ultimately a never-ending cycle of agile set-up sprints in which you perform tests, run analyzes and implement improvements. You are successful if you grow continuously, but that does not mean that you can rest on your laurels.

A good final example in that context is Airbnb. The history of that company is full of growth hacks. Many well-known examples of growth hacks concern companies and services that were still in their infancy, but Airbnb continues to hack - even after its definitive breakthrough. A great innovation that came about through growth hacking had to do with a thorough analysis of houses, apartments and rooms that were hardly booked. There appeared to be one common denominator: all these poorly rented units had ads with photos in low resolutions. When a number of units were visited by professional photographers and new photos were put online, the difference with units that 'just' performed well disappeared. The poor quality of the photos of the weakness in the Airbnb system; by measuring and applying data analysis, this weakness was found and the weakness could be addressed. Relatively little effort and investment could thus lead to a significant increase in the number of rentals. That is why your growth hack has succeeded.

The Bloeise editorial board consists of Thomas Lapperre. These posts are not mentioned in a personal capacity because they are written by others: hired copywriters for sponsored content and press releases submitted. The editorial staff cannot be held accountable for the press releases submitted - text and images have been supplied externally.

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